Mitel and Avaya

25 Apr 2019

The Wall St. Journal is reporting that Mitel has made an offer to acquire Avaya. Maybe. It’s 4AM in Singapore, but I have a few thoughts on this.

While it’s not surprising, it’s probably not that realistic either.

It’s not surprising for several reasons. First, last month Mitel signaled it was ready to start acquiring companies again. I think they actually said something about resuming its consolidation of the industry or something along those lines. Ok, that’s worked well for them in the past. Secondly, Avaya is rumored to be a target for acquisition. So, an offer isn’t too surprising or unreasonable.

However, the offer itself is likely unreasonable. The answer to what a company is worth is complex, but ultimately it’s what the market will bear. I expect Avaya will sell for more than the $2.2 – $2.4B that Mitel has reportedly offered. Avaya shareholders will also likely want some cash, and it appears Mitel only offered stock.

Mitel may or may not have made an offer, but I am sure of a few things. I am sure if they did make an offer it was low. The only thing Mitel loves more than buying companies is stealing them. If Mitel made a bid, it really just started the auction.

Read the rest of my thoughts on TalkingPointz

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